The basic objective of financial statement is to provide
information, which is useful for persons and groups inside and
outside the organization, which serve as the foundation for various
decisions. Some of the primary users of financial statement and
their use are as follows.

S. no

Primary Users

Use of financial statement

(i)

Investors

To decide

• The safety of their investment by assessing the position,
progress and prosperity of the business.

• whether the company can earn enough income to provide a
satisfactory return like dividends and capital gains.

(ii)

Creditors, banks and other lending institutions

To determine whether

• to lend money to the company.

• the principal and interest thereof will be paid in when
due.

(iii)

Suppliers

To decide whether the company can continuously buy and pay for
goods and services.

(iv)

Employees and Trade unions

To decide

• the earning capacity of the business since their remuneration
and other benefits depend on it.

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